Our friends at the Violence Policy Center (VPC) have just released a new report which details a 77% decline in federal gun dealers since 1994, which they believe reduces the number of dealers who might be “a known source of weapons for criminal gun traffickers.” Exactly how large a role FFL-dealers actually play in pushing guns into the ‘wrong hands’ has never been adequately analyzed or explained, but looking for any piece of silver lining when it comes to regulating guns in the Age of Trump isn’t a bad thing.
The only problem with this particular piece of silver lining, however, is that the data actually gives a somewhat different perspective on the whole issue of FFL-dealers than what the VPC would like us to believe. Because while it is true that the number of FFL licenses has declined by more than two-thirds over the past twenty years, the number has actually increased by more than ten percent in the last nine years.
And why has there been an increase in FFL dealers after the drop in license-holders after 1994? Remember this guy named Obama and a doubling in gun sales beginning in 2008? Remember an even greater sales increase after the 2012 tragedy at Sandy Hook and an abortive attempt to widen NICS-FBI background checks to cover secondary sales? Between 2007 and 2016 the number of gun dealers increased in 38 of the 50 states. North Carolina dropped from 6,486 dealers in 1994 to 1,327 in 2007, but FFLs in the Tar Heel State are back up to 1,921, an increase of 45%! In South Carolina the numbers went from 2,332 in 1994 down to 529 in 2007 and now back up to 886, not a bad jump in just nine years.
The real reason that FFLs dropped so steeply after 1994 (mentioned in the VPC report) was the cost of the license went up from $30 to $200, which meant that many of the pre-94 dealers were not really in business so a 700% increase for the license fee was just too steep. But it’s not as if the Treasury Department lost any money when all those guys buying guns for themselves at wholesale prices gave up the ghost. The license fees under the pre-94 regime would have generated around 7 million bucks. When the fee went to $200 the revenue from the 56,000 current dealers amounted to 11 million and change.
The fact that there are roughly one-quarter the number of FFL-holders today as compared to 1994 says absolutely nothing about the relationship between the number of dealers who actually sell guns to consumers as opposed to selling guns to themselves or to a few friends. Even with the ATF’s backslapping about their vaunted programs to keep dealers in line, probably no more than 5,000 dealers are actually bringing new inventory to the civilian market and thus might be contributing to the spread of crime guns.
Where do I get that number? It’s simple – just go to the website of Smith & Wesson or Glock or one of the other gun manufacturers and do a search for their stocking dealers in any particular state. Gun makers go out of their way to promote product sales by listing every dealer who stocks and sells their wares. Glock lists 272 dealers in North Carolina and the ATF says there are 1,921 FFL-holders in the state. Smith & Wesson has about 50 dealers in its home state of Massachusetts and there are 386 active FFLs in the Bay State.
If you want to write about regulating any industry you need to know how to figure out how to understand the industry itself. And you’re not going to get a complete view by using information created outside the industry by regulators like the ATF. Remember, in the Age of Trump it doesn’t matter whether anything is based on facts or not. All the more reason why folks who don’t share his love of the gun industry need to know how that industry really works.